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TMI Blog1995 (2) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ules provided in the Central Excise Tariff Act, 1985. According to the petitioners their product was paper based decorative laminated sheets and not plastic based. Therefore, they classified their product under chapter 48 sub-heading 4818.90 upto February 28, 1988. Thereafter from March 1, 1989 the product was classified under sub-heading 4823.90 of the Schedule to the Central Excise Tariff Act, 1985. The petitioners filed classification list before the Assistant Collector accordingly. The Assistant Collector did not approve the same and held that the product manufactured by the petitioners was falling under Chapter 39 of the Schedule to the Central Excise Tariff Act, 1985, which dealt with plastics and articles thereof. Therefore the petitioners contend that they started paying the duty of excise under protest. In some cases the dispute as regards classification appears to have been carried upto Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT) and thereafter upto the Supreme Court before which the appeals filed by the Department against the decision of CEGAT classifying the article under sub-heading 4818.90 upto February 28, 1988 and under sub-heading 4823.90 from 1-3-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners. The Court at the interim stage observed that the petitioners claimed Rs. l,36,84,418.65 ps. with interest at the rate of 18%. However the Court felt it just and proper at that stage to direct the respondent to refund only the principal amount on the conditions mentioned in the order. Pursuant to the mandatory direction given by the Court, the amount of refund of Rs. 88,66,022.74 has been paid to the petitioners in cash and credit of Rs. 33,23,107.98 has been given. This order has been passed by the Assistant Collector on April 6, 1990. Against the said order the Department has preferred appeal before the Collector (Appeals) who rejected the appeal preferred by the Department as per order dated September 24, 1992. Against the said order the Department filed appeal before CEGAT and the same is pending. Spl. C.A. 960/90 :4. In the instant case also the petitioners had classified their product under sub-heading 4818.90 from March 1, 1986. They straightaway filed refund claim on September 1, 1986 for the period commencing from March 1, 1986 to August 31, 1986. The Assistant Collector, vide his order dated December 17, 1987 disapproved the classification and ordered classi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al relief within three months. 5.1The petitioners filed refund claim on October 20, 1989 before the Department. According to the petitioners, since the refund claim was not decided the petitioners approached this Court. On February 19, 1990 Division Bench of this Court (Coram: G.T. Nanavati, J. as he then was & J.U. Mehta. J.) passed mandatory order at interim stage and the principal amount of Rs. 83,49,099.65 ps (Rupees eighty three lakhs forty nine thousand ninety nine and paise sixty five) was ordered to be paid to the petitioners on the terms and conditions mentioned in the order. However, the Court observed that at that stage the claim of interest at the rate of 18% per annum be not granted. The petitioners had filed Misc. Civil Application No. 70/90 in this very special civil application. According to them there was confusion with regard to the amount inasmuch as instead of Rs. 93,44,771.70 ps. figure of Rs. 83,49,099.65 ps. was mentioned in the order. However, the Court disposed of the application by keeping it open for the petitioners to convince the Department about the amount and for the Department to verify the amount. In the instant case it appears that there does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39. The Assistant Collector, as per his order dated September 1, 1988, disapproved the classification and held that the products were classifiable under Chapter 39. The petitioners preferred appeal before the Collector (Appeals) who decided in favour of the petitioners as per order dated March 21,1989, and directed that decorative laminated sheets be classified under sub-heading 4848.90 and Industrial laminated sheets under sub-heading 8546.00. The Collector (Appeals) also directed to grant consequential relief. The department preferred appeal No. E/2499/89-C before CEGAT and challenged the order passed by the Collector. 7.1On March 29, 1989 the petitioners filed refund claim for the period commencing from March 1, 1986 to January 31, 1989, pursuant to the order passed by the Collector (Appeals). The Assistant Collector rejected the refund claim as per his order dated June 26, 1989. The Collector (Appeals), as per order dated September 28, 1989 allowed the appeal filed by the petitioners against the order rejecting the refund claim passed by the Assistant Collector. CEGAT, by common order dated October 4, 1989 [1990 (49) E.L.T. 75 (Tri.)] disposed of a group of appeals (Appeals No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order dated February 19, 1990. Petitioner No. 1 firm and its partners filed undertaking on December 10, 1994 and have undertaken to refund the amount received by them to the respondents in case they lose in the petition. 8.2In special civil application No. 960/90, though the petitioners received the amount, no undertaking was filed till December 8, 1994. It was submitted that the undertaking was filed earlier. Thereupon the learned Counsel for the petitioners was handed over the entire record of the Court. But he was not able to point out any such undertaking from the record of the petition, nor any proof of undertaking having been filed earlier was produced. Ultimately undertaking dated December 9, 1994 was filed. Again, that was not in terms of the interim order passed by this Court. Therefore further undertaking has been filed by the petitioners on December 10, 1994. By this undertaking the petitioner-Company and its Directors have undertaken to refund the amount received by the petitioners pursuant to the interim order dated February 19, 1990 passed by this Court. 8.3In special civil application No. 965/90 no undertaking was filed by the petitioners pursuant to the interim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of attachment of the property belonging to the petitioners shall remain in force, and that the Department may not proceed further pursuant to the order of attachment and for effecting coercive recovery for a period of fifteen days from today. 9.Learned Counsel for the petitioners submit that all these petitions are for seeking compliance of the order of CEGAT and or other departmental authority which passed the order as regards classification of the articles in question. In his submission, as per unamended provisions of section 11-B(3) of the Act which remained in force upto September 20, 1991, no application for refund of the amount was required to be submitted. In his submission there were three alternatives for seeking refund of the excise duty paid, namely: (i) seeking refund as per the unamended provisions of Section 11-B(3) of the Act which inter alia provided that when an assessee succeeds in appeal the consequential relief was required to be granted by the officer concerned without insisting upon separate application for refund; (ii) refund sought on the ground that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim is made before the Department and the department is required to decide the same in accordance with the statute. However, this question directly does not arise in these petitions. The case is required to be decided on the basis of the law as it exists today. In this view of the matter we do not discuss this point any further. 11.In the case of Titagarh Paper Mills Co. Ltd. (supra), it appears that the Collector (Appeals) had passed order of refund. Since it was not being carried out the High Court of Calcutta appears to have been moved. The High Court directed on August 16, 1991 that the order of the appellate authority be carried out within a period of three weeks. That was not carried out. It was submitted that in view of the amended provisions of section 11-B which came into force on September 20, 1991 it was not carried out within three weeks as directed. Therefore application was made by the Department for modification or order dated August 16, 1991 in view of the amending section 11-B of the Act which has come into force on September 20, 1991. Learned single Judge of the Calcutta High Court came to the conclusion that the amended provisions of section 11-B had no effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this basis it was submitted that the petition was for execution of the order passed by CEGAT. Therefore it is further submitted that the order of refund passed by the departmental authorities, after the interim mandatory order passed by this Court, should not be disturbed, and it should be held as conclusive. 14.The aforesaid submission cannot be accepted. First of all, the very dispute with regard to classification of the article manufactured by the petitioners is pending before the Hon'ble Supreme Court. It is an undisputed position that against the judgment and order passed by CEGAT in a group of matters, appeals are preferred before the Hon'ble Supreme Court [Civil Appeals No. 3182/90 to 3202/90 - since reported in 1997 (91) E.L.T. 13 (S.C.)], and they are pending before the Hon'ble Supreme Court. Therefore, still there is no finality attached even to the question of classification of the article manufactured by the petitioners. Hence it is too much to urge that the refund claim which is made and which has been decided pursuant to the interim orders passed by this Court should be treated as final. 15.It must be noted that the departmental authority has passed order granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be adjusted as provided under Rule 57E of the Central Excise Rules, 1944. In view of the aforesaid factual position the contention of the petitioners that the petitions are for execution of the order passed by CEGAT cannot be accepted. 17.It is true that one of the basis of the petitions is that the petitioners have succeeded in appeal before CEGAT. But that does not mean that the petitions are for execution of the order passed by CEGAT. This High Court does not sit as an executing Court for seeking execution of the order passed by the statutory authority. The petitions, as stated hereinabove, are for a writ of mandamus. It may be that grant of writ of mandamus may result into compliance with the order passed by the Statutory authority, but on that ground it cannot be said that the petitions are for execution of the order passed by CEGAT. The petitions, in form as well as in substance are for claiming refund of the amount of excise duty, which according to the petitioners was erroneously recovered from them on account of wrong classification of their product, i.e. decorative laminated sheets. 18.Learned Counsel for the petitioners submitted that there was no need for making form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chment is no bar to the amount of refund claimed by the assessee by way of writ petition on the ground that duty was paid by them under mistake of law during the period beyond the period of limitation under Section 11B of the Act. In support of the aforesaid submission the following decisions have been relied upon: (i) Gurucharan Industrial Works v. Union of India reported in 1988 (33) E.L.T. 648 (All.); (ii) ITC Ltd. v. M.K. Chipkar, reported in 1985 (22) E.L.T. 334 (Bom. DB); (iii) New India Industries Ltd. v. Union of India, reported in 1990 (46) E.L.T. 23 (Bom.); (iv) Asst. Collector v. Andhra Fertilizers Ltd., reported in 1987 (32) E.L.T. 343 (A.P.); (v) Union of India v. Arpai Incorporated, reported in 1989 (40) E.L.T. 311 (Bom.); (vi) Alembic Glass Ltd. v. Union of India, reported in 1990 (48) E.L.T. 232 (Kar.). However, the aforesaid question does not directly arise in these petitions. Even if the question were to be considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Article 266, and Article 296 of the Constitution which refers to the doctrine of escheat and bona vacantia have been considered. In para 16 of the reported decision the Division Bench has observed that if the tax unauthorisedly levied and collected by the State is ordered to be refunded to any intermediary who has not suffered the burden of tax, the consequence would amount to taxing people by the manufacturer, trader or businessman. "Such persons have no authority or power to tax people". If the Court while exercising powers under Article 226 of the Constitution of India directs refund of the amount of tax collected to the person who has "paid" the tax (but who has not suffered the burden of the tax), it would amount to permitting taxation by private individuals. This could never be done by the Court while exercising powers under Article 226 of the Constitution of India. It would amount to perversion of the Constitution rather than enhancing the objects and ideals of the Constitution. 20.In view of the aforesaid settled legal position, as far as this High Court is concerned, the petitions under Article 226 of the Constitution of India cannot he entertained unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Central Excises & Customs Laws (Amendment) Act, 1991 (No. 40 of 1991) which came into force from September 20, 1991, the Hon'ble Supreme Court has held that the thrust of the amendment vide Section 11B(2) of the Act is that the refund of duty paid by the manufacturer can be allowed, if due, only in cases where the assessee has not passed on the incidence of such duty to any other person. Thereafter the Hon'ble Supreme Court referred to sub-section (3) of the amended Section 11B which inter alia provides as follows : "(3) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provision of this Act or the Rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2)." After referring to the aforesaid provision the Supreme Court negatived the contention that the amended provisions of Section 11B can be applied only prospectively, i.e. to refund claims made after the introduction of the amendment and would not apply to pending cases and refund claim filed prior thereto. The Supreme Court held that even if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitions for getting the order passed by CEGAT executed. This cannot be said to be any distinction whatsoever. As held by the Hon'ble Supreme Court, in view of the provisions of section 11B(3) of the Act, pending claims of refund were covered by the provisions of section 11B(3). As indicated hereinabove the petitions filed by the petitioners cannot be said to be petitions for seeking execution of the order passed by the appellate authority. Even if the petitioners' contention is accepted that the petitions were for seeking execution of the order passed by the appellate authority, then also the amount of refund is paid to the petitioners as and by way of interim arrangement. Interim order made by this Court is subject to the final order. In view ot the decision of the Hon'ble Supreme Court in the case of Jain Spinners (supra) and in I.T.C. Ltd., (supra), after amending Act No. 40 of 1991, even the High Court has no jurisdiction to pass any order of refund. 25.It is ought to be contended that the refund claim made by the petitioners has been finally concluded by the order passed by the departmental authorities pursuant to the interim order dated February 19, 1990 passed by this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked to restore the same to the other party. The Court is duty bound to place the parties in the position which they would have occupied but for such order. It may be noted that granting of restitution is not discretionary. The words, "so far as may be" occurring in the section are empowering the court and they do not confer discretion on the Court. The underlying principle of doctrine of restitution is that on reversal of a decree or order, the law imposes an obligation on the party who received the benefit of the erroneous decree or order to make restitution to the other party from what he has lost. In proceedings to which provisions of Code of Civil Procedure apply, interest is part of the normal relief given in restitution. We do not see any reason why this principle of restitution which governs the proceedings to which the provisions of Code of Civil Procedure apply, be not applied to the proceedings in which writ jurisdiction of the High Court under Article 226 of the Constitution of India is invoked. The Court cannot permit any party to suffer on account of its order. It is settled principle of law that no one should suffer on account of the orders of the Court. It is one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o restitution as provided under section 144 of the Code of Civil Procedure and under the inherent powers under section 151 of the Code of Civil Procedure. The Hon'ble Supreme Court has inter alia observed that the provisions of section 144 are only a part of the general law of restitution. It is not exhaustive. Jurisdiction to make restitution is inherent in every court and will be exercised whenever the justice of the case demands. The Hon'ble Supreme Court referred to its earlier decision in the case of Binayak Swain v. Ramesh Chandra Panigrahi, reported in AIR 1966 SC 948, and reiterated the principles laid down therein. In that case the Hon'ble Supreme Court has inter alia observed that the Court in making restitution is bound to restore the parties, so far as they can be restored, to the same position they were in at the time when the Court by its earlier action had displaced them from. 30.In all these cases, in our opinion, if the petitioners are directed to refund the amount received by them with 18% interest it would meet the ends of justice. It may be noted that in the year 1990 when the petitioners obtained the interim relief from this Court, the bank rate of interest fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount is paid, within one months from today, i.e. on or before March 20, 1995. The Department will be at liberty to take all necessary actions as may be permissible under law to protect the interests of the Revenue and to see that the amounts are recovered. The Department will also be at liberty to enforce the undertakings furnished to this Court by the petitioners in each of the petitions. Subject to the aforesaid observation and directions, rule discharged with costs in each petition. Interim relief granted earlier stands vacated in each petition. 32.At this stage, learned Counsel for the petitioners states that pursuant to the mandatory order passed by this Court the amount paid is less than what was prayed for in the relief clause. If that be so, the Department will verify the amount paid and will ensure recovery on the basis of the actual amount paid. 33.At this stage, the learned Counsel for the petitioners requests that the aforesaid order vacating the interim relief and directing the petitioners to restore the amount with interest to the respondents be kept in abeyance for a period of two months so as to enable the petitioners to approach the superior forum, i.e. the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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